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Reduced port dues can stimulate economic development during the pandemic

12/ 10/ 2020
  The EBA logistics community is concerned about the decline in business activity and reduced production in Ukraine and, consequently, the rapid decline in income, which creates the need for additional measures to maintain export potential and ensure the competitiveness of Ukrainian enterprises in the crisis. The business considers that the reduction of port fees could be one of the incentives, which the European Business Association has consistently supported in recent years. According to the calculations of the member companies of the EBA Logistics Committee, a reduction of port fees just by 20% would expectedly let Ukraine maintain its main export-oriented industries and, in the future, increase annual cargo turnover in seaports to 190 million tons in 2021-2025. Daria Sichkar. EBA Logistics Committee Manager. Imperfect tariff policy in the field of transport reduces the efficiency of transit capacity of Ukraine. Accordingly, this is one of the reasons for the decrease in transit traffic through Ukraine, in the number of ship entries to Ukrainian ports, the inability to provide quality transport services for export traffic, which has a negative impact on the competitiveness and efficiency of the national economy. According to World Bank experts, the port fees in Ukraine can be potentially reduced to 63%. This will have a serious economic effect by attracting cargo flows to Ukrainian ports. For example, the reduction of port dues from January 1, 2018, by 20% will enable us to increase cargo turnover in Ukrainian ports by 21% and reach the level of 160 million tons in 2019. Currently, the potential to reduce port dues remains at 40% -50% for an increase in the competitiveness of domestic ports. Moreover, according to business representatives, the revenues of the Ukrainian Sea Port Administration from port dues are mostly not used for infrastructure development and modernization. The technical backwardness of Ukraines ports hinders the development of Ukraines export industries and economy. Therefore, reducing the rate of deductions of the USPA’s net revenues to the state budget by 30% while reducing port fees by 20%, will allow the USPA to invest about 1.5 billion UAH / year in the modernization of port infrastructure of Ukraine. Therefore, in order to reduce the tariff burden on business and create conditions for modernization of seaports, maintaining their competitiveness in world markets, the EBA Logistics Committee experts asked the Prime Minister of Ukraine to initiate the necessary changes towards the reduction of port dues and the USPA’s dividends to the state budget starting from 2021.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

The EBA logistics community is concerned about the decline in business activity and reduced production in Ukraine and, consequently, the rapid decline in income, which creates the need for additional measures to maintain export potential and ensure the competitiveness of Ukrainian enterprises in the crisis.

The business considers that the reduction of port fees could be one of the incentives, which the European Business Association has consistently supported in recent years. According to the calculations of the member companies of the EBA Logistics Committee, a reduction of port fees just by 20% would expectedly let Ukraine maintain its main export-oriented industries and, in the future, increase annual cargo turnover in seaports to 190 million tons in 2021-2025.

Daria Sichkar EBA Logistics Committee Manager
Imperfect tariff policy in the field of transport reduces the efficiency of transit capacity of Ukraine. Accordingly, this is one of the reasons for the decrease in transit traffic through Ukraine, in the number of ship entries to Ukrainian ports, the inability to provide quality transport services for export traffic, which has a negative impact on the competitiveness and efficiency of the national economy.

According to World Bank experts, the port fees in Ukraine can be potentially reduced to 63%. This will have a serious economic effect by attracting cargo flows to Ukrainian ports. For example, the reduction of port dues from January 1, 2018, by 20% will enable us to increase cargo turnover in Ukrainian ports by 21% and reach the level of 160 million tons in 2019. Currently, the potential to reduce port dues remains at 40% -50% for an increase in the competitiveness of domestic ports.

Moreover, according to business representatives, the revenues of the Ukrainian Sea Port Administration from port dues are mostly not used for infrastructure development and modernization. The technical backwardness of Ukraine’s ports hinders the development of Ukraine’s export industries and economy. Therefore, reducing the rate of deductions of the USPA’s net revenues to the state budget by 30% while reducing port fees by 20%, will allow the USPA to invest about 1.5 billion UAH / year in the modernization of port infrastructure of Ukraine.

Therefore, in order to reduce the tariff burden on business and create conditions for modernization of seaports, maintaining their competitiveness in world markets, the EBA Logistics Committee experts asked the Prime Minister of Ukraine to initiate the necessary changes towards the reduction of port dues and the USPA’s dividends to the state budget starting from 2021.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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